Select Committee on Trade and Industry Appendices to the Minutes of Evidence


Memorandum submitted by the Association of Aerospace Universities

  The following notes describe some of the arguments for taking part in a reusable spaceplane development program within the UK and expand on the points raised in the letter sent by the Association of Aerospace Universities (AAU) to the committee dated 23 March 2000.


  Civil aviation has plateaued technically since the major changes brought about by the introduction of the jet engine and pressurised airframes. Further improvements are now incremental and mostly centre around reducing costs rather than improving performance. As a consequence, emerging nations, particularly in the Far East, are catching up technically and soon will be in a position to compete with established Western aerospace industries. Due to their much lower wages and ability to attract Western investment finance, it is probable that eventually the civil aircraft market will be lost in a similar manner to other, older, industries such as ship building, cars, motorcycles, cameras and sound equipment. Even military aviation appears to have an uncertain future with probable further reductions in defence spending coupled with moves towards Unmanned Air Vehicles.

  To arrest the decline in the UK's aerospace industry, new products are required which can be exported to the rest of the world. Space represents such a business area that could fulfil this requirement due to its massive long-term commercial potential which could be unlocked by the emergence of a low cost space transportation system.


  Access to space is currently achieved by the use of expendable rockets, with the exception of the US Space Shuttle that is not available for commercial launches and is operated for national prestige, scientific and military reasons. Expendable launchers are adaptations of ballistic missile technology which were developed in the 1950's and 60's to meet the urgent needs of the space race. They are a totally inadequate method of accessing space in the long term for the following reasons:

    High launch costs (approximately $150 million)

    Long lead times (three years typical)

    High failure rate (2 to 4 per cent)

  The consequences of these characteristics are:

    Spacecraft have maximum reliability and capability in order to avoid the expense and delay of a re-launch should a failure occur.

    Insurance typically 25 per cent of the spacecraft cost due to the low launch reliability, and the inability to repair spacecraft in orbit.

    Long project cycle times.

    Limited traffic volume into space due to cost and lead times (approximately 100 per year). Worldwide expenditure on space transport is 5 per cent of aviation yet it purchases only 0.0002 per cent of the number of traffic movements.

  To overcome the inadequacies and consequences of the existing space transportation systems reusable vehicles are required which operate on principles similar to aircraft.


  The Airbus and Ariane products are excellent examples of Europe's ability to compete against the USA in the aerospace marketplace. However, it is probably that a reusable Space Transport System (STS) development that involved the UK would include the USA for political as well as commercial reasons.

  The USA is not necessarily so far ahead technically that the UK is unable to compete against them. Thus the emergence of the HOTOL program in the UK in the early 80's initiated the current wave of interest in reusable launchers, which continues to this day. The USA responded with their X30 NASP project, which pursued a different, and far more technically demanding, approach than HOTOL, leading eventually to the spending of about $3,000 million on the project without any definitive progress nor end product. By contrast about £10 million was spent on the HOTOL project before it was discontinued, due to lack of further financial support. However, SKYLON is the only spaceplane project to date in which its promoters were sufficiently confident in its viability to published detailed drawings and performance data. The Americans have recently demonstrated their failings in this area again by spending approximately $1,000 million on the X33 SSTO rocket vehicle, which has fallen far short of its technical objectives and failed to become a step towards the development of a reusable STS. It should be emphasised that the technical shortcomings of both the American projects had been identified in the UK before they started and their eventual demise predicted.



  The SKYLON spaceplane was conceived from the outset as a commercial project whereby its development and production costs was recovered and profits achieved for manufacturers, financiers and operators. Business plans have been produced demonstrating its commercial viability.

  Ironically, due to SKYLON's attractive ground handling and operational characteristics, interest has been expressed within the USA in developing a military variant of the vehicle.

  In both cases, the objective is to reduce the cost of access to space by an estimated factor of seven to 20, provide a transport system with greatly reduced lead times for a projected launch (days rather than years) and provide generalised payload handling for most payloads through containerisation.

  Because of reduced demands on spacecraft reliability when launched by SKYLON, the costs of spacecraft can also be reduced by an estimated factor of 2.5 to 4.5 when designed in accordance with consideration of redundancy and reliability that takes account of the reduced launch costs and re-launch lead time.

  Reduced transport and spacecraft costs translate into reduced costs of the services that the spacecraft facilitate (both military and civil) and of which the UK is the world's second largest commercial user, but not a significant supplier.

  Foreign nations such as the USA and Japan, as well as collectives such as Europe and the CIS, through nationally funded work, still strive to design a spaceplane with SKYLON's characteristics. These nations are addressing issues which have been submitted to the UK Government already solved for several years.

  The benefits to the UK of taking a leading role in the development of SKYLON are therefore believed to be clear cut, the main ones being re-stated below.


2.1  Direct Sales

  SKYLON is designed for 200 aircraft-like operations from runway-based facilities. A preliminary market survey has shown the potential for a minimum of 45 vehicle sales to the civilian and military communities in Asia, Australia, Europe, North and South America. For the business case, 30 sales have been assumed; however the overall economics of the project are not sensitive to this figure. In January 1997 prices the following costs were derived:

    Total development cost—£5,493 million (independently confirmed)

    Total production cost (30 units)—£4,080 million (independently confirmed)

    (These figures include company profits)

  It is intended to sell the vehicles for £418 million each at 1997 prices, recovering a total of £12,540 million. The interest recovered on the development finance is therefore £2,967 million, representing a 54 per cent return on development investment.

  An interested mixture of government and private sources could provide the necessary finance, the government component, like that from the private sector component, being repayable with interest.

  Interaction with the USA has shown that, in addition to the commercial opportunity, there is a military role, which could be incorporated into the economics of the project for the mutual benefit of both military and civil operators.

2.2  Employment

  The SKYLON project, based on the above data, will provide approximately 445,000 man-years of high quality employment. The proportion of this within the UK will depend upon the degree of UK involvement.

  This employment will be mainly within the aerospace industry, which will halt its current decline or even recover it. The aerospace industry is one of the UK's largest exporters of high technology equipment, and is a prime mover in the economy, with a major impact on secondary industries such as information technology, construction and transport.

2.3  Spacecraft Costs

  Launch costs of SKYLON include launch site leasing, range control and safety, maintenance, insurance, propellants and repayment of the vehicle purchase. This is on average $22.4 million during the first 10 years following introduction, falling to $6.7 million thereafter. These values are between 1/7th to 1/20th of the current costs of launchers and their subsidies.

  From consideration of the effect of launcher characteristics on the designed optimum spacecraft reliability, it has been found that spacecraft cost is roughly proportional to (launch cost) 0.5. Thus, not only is the launch cost reduced dramatically with SKYLON, but the satellite costs also. This will greatly reduce the cost of space services, particularly Earth observation, in which the UK has a large, and currently unprofitable, investment.

2.4  National Security

  It is in our national interest to prevent the US from recapturing control of the launcher market. On page 41 of the UK Space Policy Forward Plan it states: "US investment in future reusable launch technologies and vehicles (X-33) could leap frog the launch businesses in Europe, Japan and China, leading to longer term concerns (2005 onwards) about access to the most competitive launch services for European commercial and military satellites".

  The world-wide commercial operation of SKYLON would end this threat for ever. On the other hand, if SKYLON were developed jointly with the US as a military spaceplane, the UK would have the opportunity to purchase vehicles and exercise control over its diversification for commercial use.

2.5  Economic Impact

  The growth in space activity resulting from the introduction of SKYLON operations will create new high technology industrial demands. Both Boeing and Aerospace Corp have expressed their view publicly that the growth of business in space will be greater than in any other aerospace field. Historical precedent in other transportation fields suggests that those who initiate this move will be its first major beneficiaries.

  This new area of economic activity will remain a growth area for many decades creating a demand for high product value equipment, a stimulus of which UK industry and the national economy is in need.


  Finally, there are "intangible" but, nonetheless, important benefits in national prestige, the stimulation of innovation and inspiration of the next generation. While these issues do not in their own right justify the SKYLON development, they are real and should not be dismissed.

  Technology development needs a "focus" which a large project like SKYLON can provide in which problems that need solving are certain to be found. University research can then be targeted to investigate solutions to those problems in a co-ordinated manner with a practical end objective in mind. This process simultaneously develops technologies, many of which may have applications in other fields (spin-off) and also provides training and inspiration for the next generation of engineers. If the UK abdicates from high profile glamorous projects such as SKYLON, then young engineers are likely to drift abroad attracted by exciting projects elsewhere (often the USA) in order to apply their training creatively and thereby receive intellectual satisfaction. This "brain-drain" directly benefits the host countries by assisting their economic development but, conversely, represents a serious blow to the UK economy which loses talented people having previously paid for their education.

  If the UK fails to rise to the challenge of the next generation of aerospace technologies, it puts its aerospace industries at great risk since, not only is the developing world catching up, but also the development of a reusable STS elsewhere will no doubt result in technical spin-off which will benefit their aviation industry to the detriment of ours. For the UK to exist as a "high wage-high skill" economy we have to be "living on the edge" of technology development since, in the long term, the production of technically mature products are taken over by the developing low wage economies.

  The AAU recognises that the UK has, in the past, failed to exploit many of its best ideas. Hopefully the present enlightened Government will support this UK industry initiative and, SKYLON will not be allowed to join the long list of lost opportunities.

14 June 2000

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